Blue Whale Capital, a fund group founded by billionaire Peter Hargreaves and co-founded with him, reported a decline in revenue as well as profit after the sharp sell-off of tech stocks in the last year.
The Blue Whale Growth Fund strategy invests in US technology businesses, fast-growing companies and other high-growth companies.
The fund’s performance suffered last year due to the steep losses in tech stocks. The impact of higher inflation and interest rates on companies like Microsoft and Nvidia, two of Blue Whale’s biggest holdings, and others whose value depends on future earnings was felt by Blue Whale.
Blue Whale Capital, according to their documents, reported revenue of £7.4mn in the fiscal year ending March. This is down from £8.8mn the previous year. Profits also fell to £3.9mn, from £5.6mn.
Stephen Yiu, the fund manager, said that despite a challenging year for Blue Whale’s stocks, the outlook for inflation and interest rates, as well as the growth in artificial intelligence, had already helped them to recover.
Yiu said, “We have had a complete turnaround in performance since 2023. “If you take a look at Nvidia shares, they dropped by over 50% last year, but have risen more than 200 percent this year.”
He said that the value of the Blue Whale Fund fell by 28 percent in 2022 before rebounding the same amount last year. Nvidia is the largest holding of the fund and has contributed to the performance of the fund by a third this year. Blue Whale also has Visa and Mastercard as its top holdings. The two payment companies’ shares have risen by more than 20% since January 1.
Last year, the fund sold out of other tech stocks, including Facebook (now Meta), Amazon (now Apple), Netflix, and Google (now Alphabet).
Four of these stocks, Alphabet Apple, Amazon and Meta, along with Nvidia and Microsoft, were responsible for the US stock market’s gains for most of this year. They are part of the group dubbed “the Magnificent Seven”.
Blue Whale was founded by Hargreaves Lansdown, the investment supermarket that ranked in the FTSE 100 index and was founded in 1981.
Hargreaves said that Blue Whale, which holds more than £150mn in his family’s assets, was his largest personal investment. His next largest investment was India. He noted that the country has an impressive economic growth story and a “young highly motivated workforce”.